The Cost Shifting Economy

When most people think of business, they think of people buying and selling, making something, and selling it or maybe selling a service. The old adage of buy low and sell high is still the basic idea of business. Rich people, however, like the people who currently rule over us, do not think about any of that stuff when they hatch a business scheme. Instead, they think about how they can shift the cost of doing business onto the public or some unsuspecting suckers, like the American taxpayer. It is how rich people do business.

This is not a new idea. Cost shifting was an integral part of the Industrial Revolution. The factory owner was not covering the full cost of his labor, for example, because he did not have to cover the cost of workplace health a safety. Building a bridge was a lot cheaper, because the cost of worker deaths was not the responsibility of the builder. No one thought about the costs of environmental degradation in the 19th century, so companies were free to dump poison into rivers and pump pollutants into the atmosphere.

It is reasonable to argue that the great fortunes made during the Industrial Revolution, at least in America, were made in large part from cost shifting. After all, it was not just the direct costs like labor, which were shifted onto the public. Once a man got rich, he could afford to buy politicians, who would pass laws giving the rich business owners leverage over their smaller competitors. It is not an accident that those great fortunes were created early in the industrial age, and none were created in later stages.

The political class in the early 20th century was still strong enough to push back against the industrial barons. It became politically popular to push through trust busting to weaken the industrialist. Then it became popular to push through reforms and allow unions to organize labor. Conservative proselytizing against these policies over the decades has obscured the fact that much of it was an effort to push those private costs back into private hands. The end of the industrial age corresponded with the end of cost shifting.

Today, cost shifting is everywhere in the economy. Tech companies have exploited public utilities, like the internet, to provide media services, without having to pay distribution costs. Amazon built its business, in part, on not having to collect sales taxes like every other retailer in America. Currently, their shipping costs are subsidized by the US Postal Service which loses billions every year. Then there are the many rackets that rely on government subsidies. Higher education is just one big upper middle-class subsidy.

The biggest cost shifting racket today is the use of imported labor. Recruiting, hiring, and training Americans is expensive because America is a first world society. Citizens expect first world working conditions. That makes it hard to shift labor costs onto the public, so companies prefer foreign labor. That way, they can pay lower wages and they avoid having to deal with employees who know their rights or have ideas about forming a union. Plus, foreign workers do not sue for things like discrimination or poor safety conditions.

There is a cost to this sort of predatory labor system, but those costs are shifted to the public in the form of depressed wages and high social costs. The migrants in every hospital emergency room are not having their bills picked up by their employer. When Pablo decides to get drunk and drive over an American, his employer is not paying the victim’s family or covering the cost of Pablo’s incarceration. The fact is, there is nothing more expensive to a society than cheap labor, it is just hidden from public view.

The question though is whether it is possible to get rich in a mature economy without massive cost shifting. No great fortunes were amassed from the end of World War Two until the technological revolution. That was a period when business costs were shifted back onto business. The tech revolution made it possible to get around the regulations and laws, because the government never anticipated a digital economy. That is starting to change just as the technological revolution is winding down and the public is pushing back.

Take a look at the newspaper business. Prior to the digital age newspapers could be run profitably, but they had high labor and capital costs. In theory, the digital age offered the chance to slash those costs. The internet does not require printing presses and delivery trucks. But the internet also slashed their revenue stream. All those ad dollars are now on eBay, Monster and so forth. Newspapers, without monopoly power and with no ability to shift their costs to the public, are all losing money and headed for extinction.

That does not mean it is impossible to turn a profit without cost shifting, but it does suggest it is impossible to get rich without it. At least not billionaire rich. That would certainly explain the fanatical commitment to migrant labor by American business. It also explains the increasingly opaque financial system. It is not so much about reducing costs as hiding them in the costs of other goods and services, like taxes and health care. It is a lot easier and profitable than trying to make a better product or become more efficient.

The Dumbening

An important project of the Left for a long time now has been to discredit the idea that intelligence is genetic and therefore heritable. In order to maintain the blank slate, they have to argue against genetics and evolution. Anytime someone can produce a study showing that environment alters life outcomes, progressives rush to the internet to trumpet the study as if it was holy writ. That has been the response to this Norwegian study on intelligence, that claims to observe a reverse in the Flynn Effect.

There is confusion in the commentary, because there is confusion about the meaning of the Flynn Effect. The Left likes to claim that the Flynn Effect shows that better schools and ideological indoctrination make people smarter. What the Flynn Effect observes is that populations get smarter as environmental conditions improve. People also get taller when environmental conditions improve. In other words, an improving physical environment means more people able to reach their genetic potential.

On the other hand, the other side often leaps to the conclusion that immigration and fertility rates exclusively drive IQ. This is true in the aggregate. Import large numbers of Africans into Iceland and the average intelligence of Iceland will decline. That does not mean the native Icelander got dumber, although the decision to import Africans could be proof of that claim. The Flynn Effect observes that children will be smarter than their parents, when environmental conditions improve. A better life means better kids.

This Norwegian study is causing blank slate believers to hyperventilate because it claims to show a decline in IQ within families. Specifically, the children are dumber than their parents and younger brothers are dumber than older brothers. Children born in the 1960’s had an average IQ a little over 99, while children born in the 1970’s had an average IQ of 102. Since then, IQ’s have declined to the 1960’s level. Because this was measured within families, it rules out genetics, dysgenics and immigration as causes.

Now, the first thing to note is that blank slate people employ the same tactic we used to see with the intelligent design people. The ID’ers would hunt around for anything they could hold up discrediting Darwin or natural selection, no matter how trivial or tangential, so they could claim evolution was not science. This was supposed to “prove” that intelligent design was therefore a valid theory. Blank slate people play the same game by trying to poke holes in genetics.

There’s a word for this sort of argument. It is called sophistry. Just because natural selection cannot solve every puzzle in the fossil record, that does not mean magic is the default explanation for the fossil record. Similarly, just because IQ’s appear to be declining within Norwegian families does not mean IQ is not heritable. It has always been known that intelligence varies within families. The question posed by this study is what is causing the change.

Further, it has been observed for a long time that average intelligence within Western societies have been declining since the 1970’s. Overall IQ appears to have peaked in the 1970’s and been in decline ever since. Immigration is one cause. Another is the habit of smart successful people having fewer children. The opening scene to Idiocracy is not entirely wrong, even though fertility among the poor has declined. Smart people used to have big families, because they could.

Again, this Norwegian study is not reporting this sort of result. Instead, they are picking up a decline within families. The one potential flaw is that it measures only male intelligence, which means sons are dumber than fathers and younger brothers are dumber than older brothers. The Flynn Effect observes increases in IQ within families due to improved environmental conditions. Therefore, a decline would logically be linked to some unknown environmental changes.

Of course, the changes are quite small, so it could simply be the Breeder’s Equation at work. The uptick in the sample population used in this study could have been driven by a bit of environmental luck. The decline is simply a reversion to the mean. The recent uptick you see in the above graph could also indicate a natural variance between a maximum and minimum for this group. The observable difference between a 99 and 102 IQ is so small it has no impact.

All that said, there are two things we know are true about human intelligence. One is the population with low-IQ’s are breeding like bunnies. Simple math says mankind is getting dumber on average. The other thing we know is that the load the smart fraction can carry is finite. Pile in enough stupid people in a population and eventually they overwhelm the efforts of the smart people. The puzzle is in figuring out the tipping point and the goal is to make sure to avoid it.

Prison Reform

One of the under discussed topics floating around Washington is prison reform, which has the support of President Trump. His son-in-law has been quietly whipping support for a bill backed by the White House. Trump’s photo-op with Kim Kardashian was part of the effort to get Democrat support for the bill. The point of the reform plan is to put more money into training and counseling for inmates, in an effort to reduce recidivism and decrease the prison population. America has 2.2 million prisoners.

Prison reform in America is a loser of an issue, mostly because all previous prison reform efforts have been nothing more than opening up the jails. Even if you are not old enough to remember the crime wave of the 1970’s, the “soft on crime, bleeding heart liberal” is a stock figure in pop culture. As a result, whites are solidly against anything with the name “prison reform” in it. That is why you never see blacks on TV making demands for prison reform. Their handlers have no interest in it.

Republicans in the House and Senate are in no hurry to pass anything. Even the open borders fanatics, who want to fill your neighborhood with criminal aliens and MS-13 gang-bangers, are not in a hurry to pass anything. Instead, they are doing the “comprehensive reform” dance, which is how politicians manage to do nothing, while endlessly talking about the need to do something. That means the odds of something getting done in the near term is not good.

That does not mean the status quo is workable. We have roughly 2.2 million people in jail at any moment. There are roughly 4.7 million people on parole, house arrest and court supervision. In a country of three hundred million, that is not a huge number, but seven million people is more than the population of Paraguay. It is close to twice the population of Ireland. One reason we have so many people in jail is it is a lot easier to manage criminals in jail than when they are on parole.

Of course, the prison population is about 40% black. That means about 2.5% of black people are in jail at any one time. Another 5% are under court supervision. As has been pointed out for decades, eliminate black crime and America is suddenly as docile as any other Western nation. That brings us back to the politics of prison reform, as everyone knows the stats on black crime. Since addressing the realities of the black population in America is forbidden, we maintain a massive human warehousing system.

The looming problem is demographics. In the 1990’s, getting tough on crime mostly meant longer sentences for smaller crimes. The “broken windows” approach to policing is mostly mythology, but getting crime under control does have a real impact. It works the same way the death penalty worked to pacify Europe. By handing out long jail sentences, cities like New York culled the herd. Eventually, the people sent away for 20 years get out of jail. What happens to them at that point?

A useful example, although not representative, is Joseph Konopka, who went by the name Dr. Chaos in his criminal career. He recruited a group of young people he called The Realm of Chaos, who committed acts of terrorism and vandalism in Wisconsin and Illinois. Konopka was arrested plotting a mass cyanide attack on the Chicago transit system. He is serving a 20-year sentence at ADX Florence and will be released in August of next year. How is that going to work out?

For those unfamiliar, ADX Florence is a prison for the worst of the worst. It is called a “supermax” prison, but the inmates call it the Alcatraz of the Rockies. It holds people like Larry Hoover of the Gangster Disciples, Barry Mills and Tyler Bingham of the Aryan Brotherhood. They also have Zacarias Moussaoui, Faisal Shahzad, Ramzi Yousef, Ted Kaczynski and Eric Rudolph. In other words, when Konopka comes out, he will have spent 20 years living with some of the most dangerous men on earth.

This is an extreme example, but illustrative. The solution to crime was to lock people up, which made sense at the time, but no one thought much about what those prisons would produce in 20-30 years. Granted, many men coming out of the system are going to be old, but they will still be useless, as the prison did nothing to ready them for life after jail. There is zero chance the social justice warriors running Facebook or Starbucks will be hiring Joseph Konopka upon his release.

The right answer, of course, is to start accepting reality about the last 70 years of social reform that started after WW2. Crime spiraled upward when the constraints on non-whites were removed, and diversity was imposed on whites. Steve Sailer famously used Katrina to illustrate this biological reality. Black crime would be half of what it is today, most of which is against other blacks, if whites were willing to reimpose the sorts of cultural restraints common before Civil Rights.

That said, the diversity horse has left the barn. By turning America into a majority-minority nation, the ruling class of the last half century has condemned future generations to endemic crime problems like you see in Brazil. One solution to this is the return of penal colonies and criminal reservations. The people serving life terms should be housed on remote islands where they can live out their lives, without causing harm to other prisoners and prison guards.

Penal colonies would also mean a shift in sentencing. A guy like Joseph Konopka would not get 20 years. Instead, he would get life in the colony. In fact, a fair chunk of the 2.2 million currently in jail would get sent to the penal colonies. There is simply no point in pretending that a man can come out after 30 years in a gladiator academy and be a normal person in society. There is no point in pretending the rest of us wish to invest in the effort, even assuming it is possible.

Pure Politics

I have returned from the land of the perpetual 70’s. Newark is a strange place, in that it feels like it is trapped in a 1970’s blacksploitation film. Walking around the city, I saw lots of shucking a jiving. I saw people dressed like extras from a movie on the great heroin dealers of the period. Atlantic City has the same vibe. Maybe the 70’s was the peak for these places, at least for their current demographic, and they still have a residue of the era hanging over them. I had the theme song to Shaft in my head for the last week.

This week I wanted to do a show on politics. I have not been doing a lot of political stuff, so I thought it was a good time to swing back and do a show in political topics. In Newark, I was around some northeast Progressives, so hearing them talk about Trump got the juices flowing. There’s also been a lot of big stuff this week. The Korea summit and the IG report are a month’s worth of content for each event. Whatever you want to say about Trump, the guy is a man of action. He’s doing as much as he can, despite the opposition.

This week I have the usual variety of items in the now standard format. Spreaker has the full show. I am up on Google Play now, so the Android commies can take me along when out disrespecting the country. I am on iTunes, which means the Apple Nazis can listen to me on their Hitler phones. The anarchists can catch me on iHeart Radio. YouTube also has the full podcast. Of course, there is a download link below.

This Week’s Show


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The Sacred Immigrant

For a long time, I have made the point that the Republican Party is not really a political party, in the sense that it is a coalition held together by common interests. Instead, it is more like a dumping ground for politicians. About a third of Republican office holders would prefer to be huddling with the Democrats, but the voters of their home district or state have decided the Democrats are too crazy, so ambitious politicians run as Republicans. The result is a party held together by convenience.

You see that with the immigration disaster brewing in the House. As it stands the GOP could simply do nothing on immigration and ride the wave of popular support into the election. That would be the smart thing. Instead, they are trying to pass an immigration bill that has no chance of making it through the Senate. Now, this could be good politics if it is popular with their voters. Instead, they are about to pass a bill highly unpopular with their voters and sure to remind Trump supporters why they hate the GOP.

A leaked draft of House Speaker Paul Ryan’s (R-WI) amnesty deal could lead to the “biggest” amnesty for illegal aliens in United States history, experts tell Breitbart News.
Ryan’s immigration deal would go beyond giving amnesty to only the nearly 800,000 illegal aliens who are enrolled in the President Obama-created Deferred Action for Childhood Arrivals (DACA) program.

According to a leaked draft of the amnesty deal, obtained by Breitbart News, Ryan’s plan would allow the entire “DACA population” to be eligible for amnesty so long as they meet low educational, work and criminal requirements, prompting the amnesty to explode in size.

That DACA population could include the nearly 3.5 million DACA-enrolled and DACA-eligible illegal aliens, and even more illegal aliens who arrive in the U.S. to fraudulently obtain the amnesty.

NumbersUSA Governmental Affairs Director Rosemary Jenks told Breitbart News that Ryan’s amnesty will — at the least — allow 1.8 million illegal aliens to stay in the U.S.

“This has the potential to turn into the biggest amnesty we’ve ever had,” Jenks said.

The leaked amnesty deal reveals that Ryan and the Republican establishment may even be considering going beyond giving amnesty to DACA illegal aliens.

A second amnesty is included in the leaked draft, one that would allow the children of temporary foreign guest workers and “anyone who has a ‘contingent nonimmigrant status’” to apply for the amnesty.

This amnesty for the children of temporary foreign workers does not have a numerical cap, allowing for an endless amount of foreign nationals to obtain amnesty through this avenue known as “Pathway Concept B.”

“The winners are the DREAMers cause they get their amnesty, Democrats because they don’t have to concede much to get the amnesty and donor-class Republicans who are interested in perpetuating the current system,” Center for Immigration Studies Director of Policy Jessica Vaughan told Breitbart News of Ryan’s leaked amnesty deal.

It is tempting to blame this on the secret “donor party” that allegedly manipulates the inner party, like some sort of Turkish conspiracy. There is no doubt that business pushes hard for unlimited “guest worker” visas. No matter how many indentured servants they are granted, it is never enough. Who is pushing for amnesty? In whose interests is it to hand a ballot to millions of foreigners? That actually hurts the cheap labor lobby, as it removes exploitable people from the labor pool.

This is an example of why so-called conservatives lost every fight over the last thirty years. They start with the assumption that the other team is working from facts and reason, motivated by a desire for some tangible goal. In this case, immigration patriots will demand everyone believe Paul Ryan is getting sacks of cash to push this ridiculous amnesty bill through the House. Sure, some of the provisions are bought by lobbyists, but the amnesty stuff has no obvious constituency in the Republican Party.

The fact is, people are more often motivated by a desire to be seen as on the side of angels, even if it brings personal risk. Just look at the number of pols who have driven a hole into their career opposing Trump. As they go under for the last time, they are smugly certain they are doing the Lord’s work. For many in our political class, open borders is a moral issue now. They want to grant the blessing of your town to the world, because they feel righteous as they watch it play out.

This suicidal altruism is not just confined to the political class. Any time the immigration question comes up, there are people who will blurt out “I’m not opposed to legal immigration. It is illegal immigration I oppose.” That is why the political class is working to legalize every conceivable form of immigration. If there are literally no laws against coming here, then there can be no illegal immigration, and everyone is happy. It is the natural result of sacralizing the immigrant.

It is why arguments from facts and reason about immigration have had no impact on the political class. Even as the public begins to get serious about the issue, the politicians are unresponsive, because they correctly see that the immigrant remains a magical figure in the mind of the public. Until a large majority of the voters become hostile to immigration in the spiritual sense, nothing changes. Yeah, the cheap labor lobbies play into this and exploit it, but the root problem here is immigrant worship.

The Cheap Credit Era

The current age is one of extreme short-term thinking. Americans have always been known for taking the short view, but today our culture is built around a “live for the moment” attitude. Sit in a business meeting and exactly no one talks about downstream possibilities. It is all about this month, this quarter or, for the sprinkling of long-term planners, the remainder of the year. You see this in our politics, where everyone reacts to the latest polls or latest news event. We are a high time preference society now.

This is why immigration reform is proving to be a non-starter. The Left side of the political class sees nothing but opportunities to rig the next election with foreign ringers, so anything that interferes with that is blocked. The Right side is wholly owned by the cheap labor lobbies, who like the idea of disposable labor. It is not that the people in charge think their grandchildren will be exempt from the ravages of mass migration. It is that they are unable to think past the moment. For our rulers, tomorrow never comes.

Just because the people in charge have no interest in the future does not mean the future is equally disinterested in us. That is what will make the coming years interesting, with regards to the economy. The Fed has finally begun the process of tightening the money supply, after a decade of an extremely loose policy. That means rising interest rates in the US and a strengthening dollar, relative to other currencies. This is not going to happen overnight, but the Fed is going to move quickly now that there are signs of real inflation.

The trouble is a big chunk of the economy has become addicted to cheap money. Take a look at the car business. Every car maker has set up special lending facilities so they can entice buyers. Instead of figuring out how to make cheaper cars, they offer near zero interest and extended terms. You can get from most makers a seven-year term on a new car, along with a super-low interest rate. They may even offer cash back you can use for the down payment. There’s even sub-prime lending at the lower end of the market.

Now, the Feds are not bringing back 1970’s interest rates and they are going to move slow. Still, it has been a long time since interest rates have been close to historic averages and that means most people making decisions do not know what it is like to live in that world. It has been 18 years since mortgage rates were above seven percent. It has been 27 years since we saw eight percent rates. It has been a decade since rates were above five percent. In other words, the world has become used to historically low rates.

It is not just the retail end that will have to come to terms with a world of rising interest rates. Most business runs on credit these days. The bigger the business, the bigger the debt burden. US corporation have $4 trillion in debt that will roll over in the next five years, according to industry analysts. What this means is their debt service will increase as they refinance old debt with new, more expensive debt. That is how corporate debt works. Most of it is fueled by bonds, so new debt pays maturing debt plus interest.

Of course, business is not the only institution relying on cheap credit. Governments around the world have come to depend on the endless appetite for sovereign debt to keep borrowing rates low. When central banks take money off the street, it means there is less money to chase after sovereign debt. Healthy debtors like the US government will not feel the pinch, but the struggling countries in Europe and South America are going to find it more difficult to sell debt. It may not take much to topple a country like Argentina.

Again, the Fed is not bringing us back to the 1970’s. Barring some inconceivable catastrophe, no one reading this will ever see double-digit interest rates again. It is just that since the end of the Cold War, America has been living with historically low interest rates and it has changed the nature of our economy. Cheap credit makes short term deals more viable and more common. It also increases risk taking. The result of all this cheap money is an economy that lives for the moment. Everyone is in it for the quick buck.

In theory, the slow gradual return of interest rates to something close to historic norms should not have a big impact. Almost thirty years of super-low rates, means most of the institutional knowledge about working in a normal rate environment is gone or heading for retirement. That means a lot of people are going to have learn the hard way about how business and finance works in a less than free money era. Therefore, no one can really be sure what is going to happen as the Feds slowly raise rates over the next years.

The Reality Gap

In the old days, a popular gag was to comment about the Soviet media’s disconnect from observable reality. Every schoolboy learned that the name of the main party newspaper, Pravda, meant “truth” in Russian. Unlike America, with its free-wheeling adversarial press, the Soviets had one newspaper that published the official truth. It is right out of Orwell! It was all mostly nonsense, of course, but it was a useful bit of propaganda that served the interests of the liberal American media.

Our library had copies of the English version of communist publications. I no longer recall if Pravda was one of them, but there were others from Soviet Bloc countries, along with publications from Western communist organizations, like the Daily Worker and Mother Jones. I enjoyed reading them, especially the news articles, because it was like experiencing an alternate reality. Even allowing for the gross bias of the New York Times, the commie rags were hilariously delusional.

As a result, I have often thought that there should be an index that measures the distance between a society’s official dogma, and observable reality. Every human society has its pretty lies. This is the grease that keeps the gears moving. There are also the things everyone knows are true, but everyone agrees to not discuss. Then there is official dogma, the prevailing orthodoxy, that exists because the people in charge demand that it exists. This is where we see the reality gap.

In the case of the Soviets, they often made claims about their material prosperity, relative to the West, which were everyone knew was nonsense. These were less obviously false in the 1950’s, as Europe dug out from the war and Stalin forced modernization on his country. The gap grew larger after Stalin, as the West slowly passed the Soviets in material prosperity. By the 1980’s, the gap between East and West was too large to hide.

You can see this gap on a smaller scale in cities like Newark and Baltimore. While in Newark, I looked up the local politicians, expecting the usual suspects. The funny part was the talk about the city, as if everything is coming together and the boom years are just around the corner. The pols in Baltimore talk the same way. They claim that young people are flocking to the city, when in reality people are fleeing. In fact, the worse things get, the more they talk about how the city is turning the corner.

The question that naturally arises is whether necessity drives this growing gap between reality and orthodoxy or does delusion drive the decline? In business, management will address falling sales with more marketing, not accepting that it is their poor management and products. The marketing efforts will exacerbate the decline, as the gap between the promise and reality grows. On the other hand, maybe lying is the last resort, when there is simply no way to address the true causes.

The other question is at what point does the gap between reality and official orthodoxy get so wide that the strain collapses the orthodoxy. In the case of the Soviet Union, it was not a bloody revolution or violent civil war that ended the system. It was mostly the fact that the system had grown so absurd, not even the people in charge could accept it any longer. That gap between official orthodoxy and obvious reality was too large to maintain, so the system collapsed.

The challenge, of course, is quantifying this gap between official orthodoxy and observable reality. For example, is the reality gap in America today bigger than the gap was in 1980’s Russia? We are required to pretend there are fifty-seven genders, which seems a click nuttier than pretending the Lada was a nice car. There has never been a time or place where humans came in more than two sexes. The Lada was crap, but it beat walking.

Does it matter if lots of people are willing to believe the nonsense? Today, lots of liberal women buy into the unlimited gender stuff. In fact, it is quite remarkable just how fast so many people in modern America are willing to accept this crazy stuff. For there to be a reality gap, the public has to know it exists. No one in the Soviet Union thought the Lada was a good car. You were even allowed to complain about the poor state of consumer goods, just as long as you kept it to a minimum.

All that said, it seems that a society can tolerate only so large a gap between reality and its official truth. Whether or not we are reaching some sort of breaking point is probably impossible to know. No one saw Trump on the horizon. Before the collapse of the Soviet Union, no one saw it coming. Maybe people just get used to the disconnect until one day, the number of people who notice it reaches critical mass. Then like a precipitate falling out of solution, the whole thing collapses.

President BoomerCon

In his most recent podcast, John Derbyshire made the point that there is little hope of getting any sensible immigration reform out of the current Congress. Paul Ryan is an open borders sock puppet, determined to undermine any effort at reform. Even if the House managed to pass something, the Senate is unlikely to take it up. They have no interest in the topic, beyond amnesty. Just as important, President Trump has largely lost interest, other than the occasional tough talk his promised wall.

This reality is vexing to immigration patriots, who correctly see this as a betrayal, as well as a supreme act of stupidity. Cracking down on illegal immigration is extremely popular and most voters now support curbs on legal immigration. A big reason Trump is in the White House is his tough talk on immigration. This is what set him apart for the dullards in the GOP primary. In theory, at least, the failure to follow through on immigration should be bad for Trump and the GOP.

That is not the case. Trump has a higher approval than Obama and Reagan at the same point in their terms. That is not entirely a fair comparison, as both inherited economies in severe recession, as well as massive reform projects. On the other hand, both came in with a massive mandate to push through their reform agendas. Trump, in contrast, entered office with a hostile uniparty and a divided public. Throw in a berserk mass media and it is remarkable that his polling is so strong.

It turns out that despite what the cool kids of the alt-right have to say about the Boomers, pleasing that generation turns out to be good politics. Trump is of that generation, born in 1946, so it is not surprising that he would be good at appealing to those voters. He is also a guy who understands the math of politics. Boomers are a third of the adult population, but close to half the voting population. Older people vote in higher numbers than young people.

Boomer politics, of course, are close to civic nationalism. Even those on the liberal end of the spectrum tend toward the orderly and law abiding, even though they embrace big government solutions. Baby boomers came of age in a prosperous and orderly age when America was still close to 90% white. That means they continue to have a high trust in political and social institutions. Despite what his critics say, Trump has operated like a good government conservative who believes in the system.

Take a look at his two big achievements thus far. One has been the systematic dismantling of the regulatory regime that had built up under George Bush and Barak Obama. This is one of those civic nationalist things that appeals to people who believe in the fundamentals of the country. Similarly, his tax bill fits in with the general sense that Americans need to keep some of their own money. Put the two together and Trump’s big achievements are right out of the CivNat playbook.

Of course, Trump’s growing obsession with the black vote is right in the wheelhouse of the baby boomer voter. Despite 70 years of failure on race relations, the boomers still believe blacks can be fully integrated into white America. More important, they still seek the approval of blacks, which is why getting a selfie with one of the three blacks at CPAC is a phenomenon on Twitter every year. Trump getting the seal of approval from Kanye West resonated with his base.

So far, the best way to describe Trump’s presidency is as a rollback of the past three administrations to something closer to Reaganism. In fact, Trump seems to be using Reagan as a model. Look at his approach to North Korea. Rather than the bellicose approach of the neocons or the appeasement of the neolibs, Trump has brought back Reagan’s peace through strength doctrine. Different facts and players, but the same approach as under Reagan.

Getting back to the immigration issue, what Trump seems to understand, and what immigration hawks have missed, is that baby boomers have not abandoned their immigration romanticism. They still think it is groovy that people come to America “yearning to be free” just as long as they do it legally. There has been no change in attitudes with regards to immigration as a cultural. Boomers still think immigration works, as long as you have the right laws.

Trump appears to have figured this out, so he has modulated his immigration approach to be heavy on the illegal side, but supportive of the legal side. That explains his strange obsession with giving the DACA people amnesty. It is not just an effort to drive a wedge into the Democrat coalition. Trump wants to be seen as supporting the immigrants “who have followed the rules” because he knows his voters get weak in the knees over that stuff.

The lesson here is that American politics is still controlled by baby boomers, whose politics are rooted in an America that is fading away with them. While this cohort dominates elections, their attitudes will be the center of gravity for our politics. As a politician, Trump has figured that out, so he has adjusted to it. What that means is the Overton Window has not moved all that much. The actuarial tables need more time to make that happen.

The Wages Of Parasites

According to this story in the Wall Street Journal, Sears is on the verge of finally going out of business. For people under the age of forty, this is a meaningless event, as Sears has not been a part of the public consciousness for decades. For those old enough to remember, the early 1990’s was the last time Sears was an anchor store at malls and shopping centers. I think the last time I had a reason to shop at Sears was at the old Natick Mall in the 1990’s. I bought a kitchen item, but I no longer recall exactly.

The conventional telling of these stories says that the big retail stores were killed by some combination of Amazon and the internet. That is mostly just mythmaking as companies like Sears were struggling when Amazon was still just a river in Brazil. The big box store, as they came to be called, was always a bad idea that started to show signs of weakness in the 80’s. The logic of this type of retail is a race to the bottom, where margins are maintained by stripping out the value that is implicit in the local retail store concept.

Think of it this way. The local retailer does more than sell stuff. In practice, he stocks the things popular with his community and offers customer service to help his neighbors get the best product for their needs. He is also going to sponsor the local little league teams and participate in the community. Big retail takes the social capital and customer service and turns that into a quick profit for the chain store, by cutting prices on the retail side and purchasing power on the supply side. It is a form of economic piracy.

This model works fine until all of the local competition is gone. At that point it is a battle of soulless wholesalers operating out of warehouse style facilities. The only competition between Sears and K-Mart, another defunct chain, was price and location. One thing that is certain about a race to the bottom is that everyone eventually reaches the finish line and for big retail that has meant bankruptcy. You see this with Amazon. Their retailing arm is the marketing expense for their media and technology services now.

This is why conservatives used to be skeptical of capitalism. They correctly saw the reality of large-scale retail. It was not that the big retailer was better at selling products or provided a better service. In fact, it has always been obvious. If you go to your local Home Depot, for example, you are unlikely to get any help from the staff, unless you tackle one of them in the aisle. Even then, the quality of service is so poor, you are better off not asking for help. Big retail turns customer service into a net negative.

Big retail operates as a parasite through false economy. It is a form of cost shifting, where the loss of social capital and customer service is pushed into the distance, while the cheap prices are in the present. The Old Right understood the corrosive nature of this form of retail and opposed it. Today, everyone laments the loss of local retail and the town shopping district. We are told it is the result of Amazon being a better choice, but in reality, the cause is the willingness of our leaders to auction off our social capital.

Another example of this is the local industrial supply store. Electrical wholesale, welding supplies, HVAC wholesalers and other businesses that served the trades used to be locally owned family businesses. They were never wildly profitable, but they provided a nice living as a family business. Fred’s Welding Supply would sponsor a little league team, while Fred participated in the community and sent his kids to the local schools. Sometimes one guy would own a couple of stores if his town or city were big enough to support it.

Today, these businesses have been bought up by investment firms powered by credit money from investors. An investment firm gets set up and they bankroll one bigger player as he buys up all of the competitors. The “economies of scale” are that the owners are removed, the accounting and sales staff is centralized, and the social capital is carted off to the investors as profit. The customers may get a small break in price, but usually the only thing they notice is the staff now treat them like strangers, rather than neighbors.

Libertarians and “conservatives” will read this and reflexively start chirping about free markets and invisible hands, but there is a reason they are now a punchline. That is because these are ideologies, if you want to be generous and elevate them to ideologies, that make all the same assumptions about humanity as the Marxists. That is, they see man as the ultimate consumer, a beast that devours his environment, in the same way a plague of locusts wipes out a field. Whittaker Chambers explained this 60 years ago.

Tragedy is bypassed by the pursuit of happiness. Tragedy is henceforth pointless. Henceforth man’s fate, without God, is up to him, and to him alone. His happiness, in strict materialist terms, lies with his own workaday hands and ingenious brain. His happiness becomes, in Miss Rand’s words, “the moral purpose of his life.” Here occurs a little rub whose effects are just as observable in a free enterprise system, which is in practice materialist (whatever else it claims or supposes itself to be), as they would be under an atheist Socialism, if one were ever to deliver that material abundance that all promise. The rub is that the pursuit of happiness, as an end in itself, tends automatically, and widely, to be replaced by the pursuit of pleasure, with a consequent general softening of the fibers of will, intelligence, spirit. No doubt, Miss Rand has brooded upon that little rub. Hence, in part, I presume, her insistence on “man as a heroic being” “with productive achievement as his noblest activity.” For, if Man’s “heroism” (some will prefer to say: “human dignity”) no longer derives from God, or is not a function of that godless integrity which was a root of Nietzsche’s anguish, then Man becomes merely the most consuming of animals, with glut as the condition of his happiness and its replenishment his foremost activity. So Randian Man, at least in his ruling caste, has to be held “heroic” in order not to be beastly. And this, of course, suits the author’s economics and the politics that must arise from them.

A life with no other purpose than to work and consume is actually lower than beastly, because the beast in the field only eats to live. It does not live to eat. Like all living things, it lives to make more copies of itself. For man, possessed of a self-awareness and the capacity to remake his environment, the purpose of life expands to the celebration of life by not only reproducing but leaving a cultural legacy for the next generation. The point of life is for old men to plant trees in whose shade they will never stand.

The auctioning off of our social capital has corresponded with the startling spike in suicide rates. Cosmopolitan globalism and the transactional consumerism that drives it strips people of their humanity. Like drug addicts, they no longer have the capacity to experience the normal pleasures. The heroin addict is always faced with the choice. Give up the junk and become whole again or take the easy way out. That is what faces the people of the modern West. The choice is revolt against modernity or amuse ourselves to death.


Never Newark Nights

I cut out of my meeting a bit early, so I could catch the train into Manhattan. I had never been inside Newark Penn Station. I was not entirely sure how to get to it, so I left some extra time to feel my way through. For some reason, I never do well in big metropolitan transit systems. It is not a thing that comes naturally to me. Since I was expected to meet John Derbyshire on 34th Street at 6:30, I gave myself an extra forty minutes. Unless I ended up in Trenton, that would be enough time to correct any mistakes.

I worried for nothing. Penn Station was a ten-minute walk and despite the near total lack of signage inside the place, I figured out the correct track for the train into the city. For some reason no one asked me for a ticket, so I could have ridden the rails like a hobo into Manhattan, but I was happy to pay the $5.40 fare. The trains run every few minutes and it only takes 20 minutes to get into New York Penn Station. I had more trouble getting street side in New York than I did navigating the New Jersey transit system.

If one wants to understand why city dwellers have a peculiarly statist politics, spend time in a big city subway system. For the people in the city, government services are essential for living. They depend on the subway, the trash collection, and the police department. The city depends upon this organic relationship between the state and the citizens. That does not exist in the suburbs or the country. There is a comfort that comes from the daily interaction with the state. Anyone who questions that relationship is suspect.

It has been a few years since I was in Manhattan, so I needed a minute to get used to the rush of the city. In that part of the town, the sidewalks are a crush of worker bees heading home or headed to dinner, along with the summertime tourists. That makes for a carnival vibe, except no one is having a good time. I had some time to kill, so I went to Starbucks to use the bathroom, but it was locked. I went to a bar and had a beer, while listening to three large Dominican women loudly complain about the lack of men in their lives.

I met John Derbyshire just outside the entrance to the Long Island Railroad station and he recommended we head over to a place called the Tick Tock Diner a block away. I must admit, I have met John several times now and socialized with him at events, but I am still a bit intimidated by it all. I am getting used to the reality of what I am doing here, but there will always be a sense that I am playing way above my league. I am grateful that he invited me out and took the long trip in from his estates on Long Island to have dinner with me.

Of course, I am the worst possible dinner guest. I started talking about thirty seconds after we sat down, and I did not shut up until we parted. I can and will dominate a conversation if you let me. Worse yet, I have no filter, so I will ramble on about the many eccentric ideas and interests in my head. When I explained to John my idea of creating a new moral philosophy based on a rational understanding of human nature, a refutation of the Enlightenment, he had the look of a man suddenly finding himself with a lunatic.

Luckily, John is a very gracious dinner companion, so he was not only willing to let me ramble on for hours, but he also picked up the check. When I let him get a word in edgewise, he mentioned that he was recording his novel into an audiobook, He is about halfway through the process. If you can’t wait for the spoken word version, you can buy it here. For those new to all of this, his book We are Doomed is a good place to start understanding the roots of the Dissident Right. John is the man who coined the term Dissident Right.

After talking his ear off, we parted company and I headed down to Penn Station, wondering if I would get on the right train. The thing that struck me about the area around the station was just how nice it was compared to Newark and Baltimore. New York is now a middle-class city, in that the people, for the most part, are urbanites with bourgeoisie sensibilities. It is not a city of gritty neighborhoods run by ethnic coalitions. It is a place for the ruling class, the young strivers of the managerial class and their non-white servants.

The train ride back was uneventful, but it did offer one glimpse of the past. Two guys with Knicks jerseys were sitting up front, drinking tall boys out of paper bags, while talking loudly about something. A black guy was walking up and down the car reciting street poetry about his love for the baby Jesus. He was panhandling, but willing to work for it. I did not give him any money, but I appreciated the effort. These were the kind of people you expected to see on trains and subways, but they are being gentrified away too.

Back in Newark, the area around Penn Station is slated for major development, but now it is mostly abandoned. I saw signs for a condo complex and it looks like they are building several of them. The hockey arena is there, along with the Prudential building, but I saw zero people in the walk back to the hotel. The plan is to gentrify the area, but it reminded me of efforts to do the same in Hartford years ago. It is really hard to inject a cultural life into a dead city, but maybe Newark will be different.